HEALTH CARE/Joan Retsinas

Filling the Swamp: MBAs to the Rescue

Drain the swamp! To the hurrahs of voters, the new administration has vowed massive drainage. The swamp is Big Government; politicians and bureaucrats are the bottom-crawlers. By a flick of the Presidential pen, we can dredge Uncle Sam from the Swamp. Gone: Dodd-Frank. Gone: EPA air and water regulations. Gone: Trade deals. Gone: Obamacare’s reins on insurers.

How to fill the swamp? With Big Business. We elected a candidate with no experience in government – considered a campaign plus – but with years of wheeling-and-dealing. Our new leader understands the bottom line – from his vantage, profits; from voters’ vantage, jobs. So we will fill the swamp with MBAs (favoring Wharton, the alma mater of the Dealmaker-in-Chief).

Our adulation of Business is not new. Since Colonial times, we have looked to the private sector as the engine of prosperity. (Alexander Hamilton created the first central bank.) Only in Great Depressions/Recessions have we truly unshackled government. Otherwise, we believe more earnestly in Adam Smith’s Invisible Hand than even he might have, trusting ourselves to those with entrepreneurial know-how.

Today we have glommed onto a hybrid: “public-private partnerships.” The savvy of the private sector will save us from the ineptitude of government, and Uncle Sam will pick up the tab. For health insurance, liberal politicians proposed extending Medicare – Medicare for all, touted by Bernie Sanders – but even though voters like Medicare, inexplicably they did not want Uncle Sam to take on the rest of the insurance market. So our leaders backed off from any extension of government. And Uncle Sam joined with Humana, Aetna, et al to provide insurance, while Uncle Sam provided the subsidies. We trusted to a benevolent partnership.

Yet the partnership is not necessarily benevolent. Insurers heed the principles they learned at Wharton et al. Uncle Sam allowed insurers into the “non-group” individual market: people who cannot get insurance through their employers must (there is a mandate, with a fine attached) buy it in this marketplace. This can be an expensive-to-insure population, but entrepreneurs need only ply those Mammon dicta.

First, give consumers choices for insurance. Consumers want choice; they have it with cereal and cars and houses. So give them choices. But make one choice alluring – a high-deductible low-premium policy. Call it “platinum.”

Second, push that high-deductible low premium policy. Any mini catastrophe – a broken leg, an appendectomy, an emergency room visit – might put the enrollee over the deductible. There is potential profit here. As a corollary, don’t underestimate the short-sighted perspective of consumers eager to save money. Remember the housing meltdown of 10 years ago, when zealous brokers convinced would-be buyers to sign for mortgages they couldn’t afford. In the short term, the buyers got houses; in the longer term, they got eviction notices.

Three, negotiate rigid “networks” that only you know. Typically an enrollee agrees to seek care within a network of “approved” hospitals, physicians, and treatment centers. That sounds feasible. But that network can be opaque, as can the payment strictures for going “out of network.” A patient can discover that while his physician belongs to the network, his hospital doesn’t. Or that even when his hospital is part of the network, the anesthesiologist or radiologist assigned to his case isn’t. So the hapless patient gets a bill that will vary, depending upon the agreement for payment of “non-network” physicians. The New York Times (Margot Sanger-Katz and Reed Abelson, “First Came the Emergency, Then the Surprise,” Nov. 17, 2016) focused on this legal loophole. Theoretically a patient might inquire about the network-status of every physician in the encounter, but in the emergency room, that is absurd. A few states have legislated against this loophole (New York, California, and Texas), but most large employer plans are self-funded and regulated nationally. No national law prohibits these emergency room “surprises;” and in our zeal to unshackle insurers from governmental regulations, Congress is not likely to pass any such law.

Indeed, if we drain the health care swamp of Uncle Sam, we will return insurance to the halcyon days when insurers ruled. Perhaps this is why, rhetoric aside, the New York Times reported Nov. 27 that “Republican states want to keep Medicaid.” And why Trump voters, while railing against Obamacare, want to keep the consumer protections embedded in the law.

We cling to a vision of Big Business as philanthropic, where the profit motive jibes with the public good. For a grittier perspective, listen to the small-time scamsters in David Mamet’s American Buffalo. They don’t wear Brooks Brothers Suits or negotiate deals in “21.” They wear Salvation Army duds and negotiate in a diner. Don, owner of a junk store, sums up business: ““People taking care of themselves.” Teach adds: “Free enterprise is the freedom of the individual to embark on any f***ing course he sees fit.”

As we drain the swamp, Caveat Emptor.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.

From The Progressive Populist, January 1-15, 2017

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